IT-intensive Defense projects face cuts

While Congress has been a little slow with the appropriations bills the last few years, this is sort of a 'support the troops' bill.' Ray Bjorklund, Federal Sources Inc.

Rick Steele

Now that the Senate has voted unanimously for its version of the fiscal 2007 Defense Department appropriations bill, the two chambers of Congress are heading into conference committee to try to iron out differences between the House and Senate versions before the end of this month.

'Here it is election year, and while Congress has been a little slow with the appropriations bills the last few years, this is sort of a 'support the troops' bill,' said Ray Bjorklund, senior vice president and chief knowledge officer at market researcher Federal Sources Inc. of McLean, Va. 'It's likely to pass before the election recess, [though] one of the Senate staffers suggested a lame-duck session. ... Then they have to get a continuing resolution before they go on recess.'

The Senate's version, with a total price tag of $453.5 billion, is $9 billion lower than the administration requested and about $5 billion less than the House bill.

'The biggest difficulty [in conference] is just going to be getting to a common allocation,' said John Scofield, spokesman for the House Appropriations Committee.

There are hundreds of differences between the two approved versions of the legislation, Scofield said.

While there is no way to know how the conference committee will compromise on these differences, the Senate Appropriations Committee report sheds some light on the thinking of that body.

The Senate voted to cut back funding for a number of IT programs because they are running late or over budget.

For instance, the Army had requested $279.6 million for its Installation Information Infrastructure Modernization Program, to upgrade the telecommunications and information infrastructure on Army installations worldwide. The Senate cut $32 million from the request because of its 'concern about the slow execution of this program,' the Appropriations Committee report stated. 'A significant amount of prior-year funding remains unobligated, evidence that the Army is budgeting funds ahead of its actual need.'

Another Army program to take a big hit in the Senate bill is the General Fund Enterprise Business System, or GFEBS. The Pentagon requested $78.4 million to begin procurement and training on the new automated financial-information system, but the 'Army restructured the program after the budget was formulated and no longer requires this level of investment during fiscal year 2007,' the Senate report stated. The Senate cut all but $2 million from the request.

The GFEBS program took a second hit in research, development, test and evaluation funding as well when the Senate cut the entire $61.2 million request.

'The Committee is aware the program is significantly behind previously established milestones and is concerned the program's slow expenditure rate may be an indicator of other difficulties in the program,' the Senate report stated. In addition, the Army still has not spent more than 83 percent of the $128.5 million appropriated over the past two years.

The Navy, similarly, had its funding cut in the Senate bill for its Littoral Combat Ship program. In this instance, the committee said it was 'troubled by [the] revelation' that the Navy had used a unit cost for the ship in the fiscal 2006 budget that did not include contract change orders, planning and engineering services, program management support and other costs not included in the ship construction contract.

'The Committee believes cost growth and design changes are jeopardizing the affordability appeal of LCS,' the committee reported. As a result, the Senate cut funding for the program by $220 million to $300.67 million, enough to fully fund procurement of one LCS seaframe, instead of two. By contrast, the House version provides all the funding the Navy had asked for.

Another high-profile program, the Navy-Marine Corps Intranet, had its funding cut by $40 million in the Senate bill.

The Defense Information Systems Agency's operations and maintenance budget would be cut by $30 million, while the Defense Logistics Agency would see a $51.9 million increase and Special Operations Command would gain an additional $64.7 million, if the Senate has its way.

Some technologies may gain in the House-Senate negotiations. The Senate increased funding by $6 million for the Active Data Rich RFID Technology Insertion and Enhancement Initiative. And digitization programs such as for DOD manuals (plus $12 million), the Navy Criminal Investigative Service (plus $8 million) and the Armed Forces Institute of Pathology (plus $20 million) were big gainers.